Cramer's Morning Take: Constellation Brands 12/1/23

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What do you see on the horizon for financial markets?

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Jim Cramer (0:33)

I'm Jim Cramer, and you're about to hear a sample taken directly from today's CNBC Investing Club morning meeting.

I have to tell you, I've been saying flop chop, you've been saying flop chop. Dow up 500 yesterday. We're kind of flattish today. I think that we are seeing, as I've been emphasizing, and I did on last night and on this morning, rotation out of me, just in the seventh a little bit, people looking for new ideas. It happens right about now.

Jeff Marks (0:57)

No, absolutely, especially when you've seen some encouraging news on the inflation front and the idea that maybe the Fed no longer needs to tighten. That's what, of course, the Wall Street Journal was saying this morning. It's rate cut still, a little bit of a debate, but yeah, we're seeing rotation, but it's money not really leaving the market, as they're the only down about.

Flat today was a nice markup at the end of the day yesterday.

Jim Cramer (1:21)

Do you know there's a period where if the oscillator stays in the four or five area, literally, and I've done a lot of work on this, it can stay here for a long time, stay overbought, if the market, if the money rotates to one area from another, because like the Magnificent Seven is not overbought.

Jeff Marks (1:41)

No, I mean, they've come in, they've come in this week.

I mean, look, we trimmed some meta Monday, some alphabet as well. I mean, look, it's just portfolio management, right? After these stocks make such big moves, they're due for arrest, not everything can go up in a straight line. And so that's why you have to right size the position after a big stretch of outperformance and look for other areas to buy.

Jim Cramer (2:03)

Well, why don't we talk about some that we have? For instance, this morning, Goldman goes from buy to conviction buy on Constellation Brands.

Jeff Marks (2:11)

Yeah.

Jim Cramer (2:11)

Now, that sucks to nothing. It has LA Partners in there. I know there's GOP risk, but not immediately.

And I think that this is one of those where you say...

Jeff Marks (2:20)

Yeah, I mean, look, this has confused us because what have they done? Well, they've talked about growing earnings, double digits, beer, 7-9% growth, volume-driven growth, by the way, not pricing, and renewed focus on shareholder returns. They added $2 billion to the buyback at that investor meeting last month. And yet the stock can't really do anything. You can just kind of see since then, not much, even as rates have come down.

But opportunity, because the company is doing well. And at some point, you would expect that to matter.

Jim Cramer (2:56)

Yes.

Jeff Marks (2:56)

It hasn't yet.

Jim Cramer (2:56)

I think it's a great example. You know what?

GE Healthcare and Humana. I don't think Humana is going to do this deal with Syngman. You know, it would be appreciably higher either way, because I think Syngman would be bidding for Humana, and Humana is having a good quarter. How about that? GE Healthcare, as we get a continual read about what you need in order to be able to get the Dimension Trust.

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